Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 01/09/2009, Docket: RP09-147-000, Status: Effective

Second Revised Sheet No. 212I.08 Second Revised Sheet No. 212I.08

Superseding: First Revised Sheet No. 212I.08

GENERAL TERMS AND CONDITIONS

(Continued)

41.4 DAILY IMBALANCE PENALTIES

(a) For Rate Schedules IT, FT-NN, FTNN-SS, FT, FT-SS and Pooling

Agreements, if COMPANY determines in its reasonable judgment that any

imbalance between the gas received by COMPANY for SHIPPER'S account

and delivered by COMPANY for SHIPPER'S account threatens the physical

or operational integrity of its pipeline system, which includes the

ability to deliver to any other SHIPPER its Daily Entitlement,

COMPANY shall have the right to interrupt or limit at any time, and

from time to time, the quantities of gas it will receive for

transportation or deliver for SHIPPER'S account to the extent COMPANY

in its reasonable judgment deems necessary in order to maintain the

physical or operational integrity of its pipeline system. Any notice

to interrupt or limit the quantity of gas to be received or delivered

by COMPANY shall be given four (4) hours in advance, or such shorter

period of time as is required to prevent physical damage to or to

maintain the operational integrity of COMPANY'S pipeline system, and

shall be limited to an amount COMPANY reasonably estimates does not

exceed the amount of the imbalance threatening the operational

integrity of COMPANY'S pipeline system. Further, to the maximum

extent practicable, COMPANY shall limit the scope and duration of any

action or order to interrupt or limit the receipt and/or delivery of

gas so that service to SHIPPER is maintained at the highest level

consistent with maintaining the physical or operational integrity of

COMPANY'S pipeline system.

If SHIPPER accrues an imbalance in violation of said limitation

notice given by COMPANY, SHIPPER shall pay the following applicable

penalty charges. Penalties on SHIPPER's imbalance shall be based on

the following percentages of SHIPPER's allocated deliveries.

SHIPPER's imbalance shall be defined as the difference of SHIPPER's

allocated receipts and SHIPPER's allocated deliveries.

Notwithstanding the above, the following activity by SHIPPER shall

not cause SHIPPER to incur a penalty under this Section: (a)no-notice

storage withdrawals made under Rate Schedule FT-NN where the notice

above limits receipts (supply long imbalances); or (b)no-notice

storage injections where the notice above limits deliveries(supply

short imbalances).

Imbalance Penalty

(Percentage of Allocated Deliveries) (Per Dth)

---------------------------------- ----------

0 - 2% or < 200 Dth No Penalty

>2 - 5% $1.00

>5 - 8% $5.00

> 8% $15.00